Euclid Summit forges closer ties for Europe's social entrepreneurs

At a time when debate about leaving the EU is dominating the news agenda in the UK, a gathering of social entrepreneurs in Zagreb (pictured above) would have proved a good advertisement for those who think membership is a good route to cementing European ties and collaboration.

The Euclid summit in Zagreb, Croatia has brought together around 200 social entrepreneurs, with a sizeable proportion of them from the host country, looking to increase their knowledge about the subject.

Euclid was formed in 2007 to create a network of civil society and social enterprise leaders. As well as knowledge sharing, the organisation tries to influence European policy and funding and also serves to raise the profile of the sector generally.

Speakers at the opening plenary of the summit presented an intriguing two hander: the challenges facing the establishing of social enterprise in Europe now and future thinking on how influential the sector might be in 2020.

Barriers to third sector development

Professor Gojko Bežovan revealed insights from the Third Sector Impact EU research project he is working on, which ‘aims to understand the scope and scale of the third sector in Europe, its current and potential impact, and the barriers hindering the third sector to fully contribute to the continent's welfare'.  

Bežovan was here to talk about some of the barriers that European third sector organisations (TSOs – his terminology) face. His findings were that although “attitudes towards TSOs were generally favourable in European countries", there were "questions regarding professionalism and legitimacy during the (financial) crisis". He continued: "Even in old member states there were several scandals and they contributed to the negative image of the sector.”

Talking about Croatia specifically, Bežovan said that “there is mistrust and suspicion towards TSOs and a lack of recognition" of the crucial role they play. Other challenges were the lack of an encouraging tax framework, the limited number of paid roles available and for those that are paid, tasks that are more and more demanding, he said.

Bežovan also identified other needs in the sector; more requirement for business knowledge, innovative leadership and a need to strengthen human resources, identifying the chance to use young people as “new development fuel”. There are 7.5 million young people in Europe not in employment, education or training.

What social enterprise will look like in 2020

Social enterprise advisor for the British Council Juliet Cornford presented the summit with a vision of social enterprise in the year 2020. Her speech was based on a British Council report.

The report states that ‘the economic and political climate is forcing all but the smallest, volunteer-led organisation to consider service delivery contracts or other forms of earned income streams'. It concludes: 'By 2020 almost all charities and associations will be somewhere on the ‘social enterprise spectrum’ – generating some if not all of their income through trading activities.'

Cornford shared a quote she liked from the Europe 2020 report, which was published by the European Commission: “Recovery cannot be based as a business as usual approach; simply going back to the way things worked before the (financial) crisis is not possible."

She pointed out the different challenges facing the continent; from how to care for an ageing population and how to offer affordable childcare for an ever growing workforce, to how to find responses to climate change and dwindling resources.

By 2020 most grant aided charitable organisations will look like social enterprises, as a large part of their income will be from earned income

According to Cornford, this presents an opportunity for social enterprise. She pointed out that 19 European countries have some kind of legal status for social ventures now and that the EU issued directives for procurement from such organisations last year.

Cornford’s speech generated a palpable ripple of excitement amongst the audience. “By 2020 most grant aided charitable organisations will look like social enterprises, as a large part of their income will be from earned income.

“All organisations will be categorised by their ability to deliver a social return on investment, blurring the boundaries between social and private enterprises. By 2020, many organisations will produce an annual impact statement, allowing society to better judge organisations, meaning social enterprises will no longer be able to claim they are better than private enterprises.

“Governments will be contracting, rather than delivering services, demanding better value for money. There will be growth in payment by results, social good for minimum financial output will be the norm and private enterprise will be doing this better than many social enterprises.

“Growth in social lending and trust in social enterprises, with their roots in poor communities, will offer bank accounts and loans to those that are otherwise excluded,” Cornford concluded.

As an example of the influence she thought social enterprise has had on business, the British Council advisor offered up Innocent Drinks, “the number one chilled brand juice in Germany, Austria and Denmark".

Cornford pointed out that Innocent is now owned by Coca-Cola, who have scaled the brand to become a market leader. Innocent give 10% of their profits to charity – around £2.4m to date. She finished by leaving the audience with a question: “Is 10% enough?”

Photo credit: G0DeX